Bigger May No Longer Be Better

What Oklahoma City home builder Rachel Odom thought was a risky business venture may turn out to be one of the most practical solutions for baby boomer - homebuyers. Four years ago she began constructing an exclusive development where houses average only 1,800 square feet, a size substantially smaller than the homes of up to 6,000 square feet that her company had been building. Odom’s modest building plans fall 500 square feet smaller than the national average for new construction.  

Odom says “Our concept was that people would pay up for smaller homes with more architectural character, but since nearly everyone seems to dream of owning a large home, we were taking a huge risk.” Turns out, Odom was thinking in the right direction. In her Talavera development, where houses are as pricey as $275,000 (almost double the median local home price), she sold 115 homes in the first 18 months and expects to sell 600 total. For most, smaller houses just make more sense.  

Though many economists over the years have predicted a mass downsizing of the average American home, this size has continued to rise from just about 1,600 square feet in the late 1970s to almost 2,300 square feet today. A number of current trends, however, are signaling Americans may really be ready to trade expansive residences for smaller, more modest abodes. Baby boomers, the oldest of whom turned62 this year, are more and more frequently becoming “empty-nesters,” and thus need less space. Also, Generations X and Y are fascinated with downtown-style living where they can enjoy easy access to entertainment and restaurants, smaller commutes, and more manageable living spaces.  

“Ask anyone how many rooms in their house they don’t regularly go into and most will admit that they actually live in a small percentage of their home,” says Marianne Cusato, an architect who, after designing many 3,000+ square-foot homes, specializes in cottages. In February, a survey of potential home buyers given by the National Association of Home builders revealed that 60% of these buyers would rather have a smaller house with more amenities than the other way around. “In the past, people would say ‘Give me space and I’ll add the features later,’” said Gopal Ahluwalia, the Association’s president of research. 

Still, many Americans will find it hard to cope with less space. Cusato believes that newly constructed houses will have layouts that can “live bigger” than their square footage would suggest. Rooms can double in function; a den can be dressed up as a formal living room when needed (though Cusato points out that it will most likely not be needed often). Cusato predicts that the formal dining room will be the next space to go. Families can meet all dining and entertainment needs by enlarging the breakfast nook. Great rooms may also become obsolete; Cusato thinks “open spaces are great, but people don’t know how to use undefined rooms. So they don’t.”  

Sarah Susanka says, in her book The Big Little House, “The majority of your guests want to be in rooms you live in, not have their socks knocked off by a three-story foyer.” Susanka believes that designing smaller homes with as much storage as possible is vital in shifting the American mindset from “bigger is better” to “smaller is more practical.”  If this trend toward smaller residences continues, it could dramatically change home values. Online house-pricing service Zillow.com’s most recent online survey shows that less expensive houses appreciate more than larger, more expensive homes. If this also continues, the omnipresent mega-homes may become a rarity.